OTT Offers More Business Opportunities Than Risks

31-Jul-13

Posted by: BBC Wires @ 11:57 am

VANCOUVER, BC – While industry narratives portray OTT content as detrimental to cable and broadband providers, nearly 70 percent of providers surveyed recognize new business opportunities presented by OTT services, far outweighing the number of respondents who acknowledge the competitive threats. These findings come from Incognito Software, a global provider of broadband software provisioning and service activation solutions, in “The Growth of OTT Content: Opportunities and Challenges for Service Providers,” a report detailing the findings from its recent “OTT Challenges and Opportunities” survey, which examines the impact that over-the-top (OTT) content is having on the current business models of cable and broadband operators.

Incognito Software fielded the “OTT Challenges and Opportunities” survey to understand the impact that the rapid adoption of OTT services is having on subscriber bandwidth usage, as well as how cable and broadband operators are adjusting their subscriber monitoring and data management strategies — or are planning to adjust them over the next 12 months — to capitalize on this trend. To obtain a comprehensive view, the company polled operators of varying sizes — ranging from regional players with up to 100,000 subscribers to large operators with more than one million subscribers — and included companies across North America, Latin America, Europe, the Middle East, and Africa. Notable findings of the survey include:

Of the providers who reported growth in bandwidth consumption, 75 percent attribute this increase to streaming video sites. This is consistent across operator size and geographic location.

Fair usage is the most common approach to managing OTT consumption. On a global level, the most popular strategies employed to manage OTT are fair usage policies (40 percent), followed by bandwidth caps (34 percent), and proprietary OTT services (22 percent).

Proprietary OTT services and service add-ons — such as unlimited video streaming or speed boosts — are expected to see the most growth in adoption rates over the next 12 months.

The vast majority of respondents employs more than one strategy, or plans to employ more than one strategy in the future (70 percent).

International operators are more likely to view OTT as a threat. While the majority of respondents agree that OTT allows for the creation of new services and revenue streams, some operators — particularly those outside North America — believe that OTT presents considerable risks.

Nearly half of all concerned respondents in Latin America are most anxious about bandwidth consumption (47 percent). Their most common methods of managing these risks include fair usage policies (63 percent), bandwidth caps (58 percent), and proprietary OTT models (53 percent).

More than 40 percent of the respondents in EMEA are most concerned about losing content to OTT providers (43 percent). Their most common methods for managing this risk is through the use of proprietary OTT services (62 percent) and fair usage policies (48 percent).

Half of the providers in North America utilize bandwidth caps as their primary means of managing OTT. Fair usage and service add-ons are the next most common approaches (33 percent).

Most operators only use one type of network monitoring tool. While a variety of network data sources are available to understand network usage, nearly 62 percent of respondents reported using only one type of monitoring tool, raising questions about the way providers are analyzing OTT bandwidth consumption.

“The widespread growth and popularity of OTT content across multiple devices is forcing cable operators to rethink their business models and how best to add value to their subscribers — and the survey results show that there is no single answer when looking at operators of different sizes and across multiple geographies,” said Stephane Bourque, president and CEO of Incognito Software. “Whether operators take a positive or negative view of OTT content, one thing is constant: their network usage is going to increase. Investing in better bandwidth monitoring and management tools will allow them to offer more customized services on a per-subscriber basis, which will ensure customer satisfaction and loyalty in the long run.”